Must A Broker-Dealer Be Licensed As A Personal Property Broker?

Is your California securities broker-dealer a licensed personal property broker? Does it need to have such a license to make loans to its customers? Anyone reading California Corporations Code Section 25217(c) would conclude that it must:

A broker-dealer licensed under this chapter making loans to its customers which are subject to the provisions of Division 9 (commencing with Section 22000) of the Financial Code shall be licensed as a personal property broker under that division.

The statute is clear, but the law is not. The Personal Property Brokers Law no longer exists. In 1995, the legislature combined the Personal Property Brokers Law, the Consumer Finance Lenders Law and the Commercial Finance Lenders Law into the California Finance Lenders Law. Stats. 1994, Ch. 1115 (effective Jan. 1, 1995, operative July 1, 1995). The new law is located in Division 9 (commencing with Section 22000) of the Financial Code. Does this mean that Section 25217(c) should be interpreted to require broker-dealers that make customer loans to be licensed under the Finance Lenders Law? The answer to that question would be “no” because Financial Code Section 22050(d) provides “This division does not apply to a broker-dealer acting pursuant to a certificate then in effect and issued pursuant to Section 25211 of the Corporations Code”. Perhaps it is time for the legislature to put an end to any possible confusion by repealing Corporations Code Section 25217.

A weather earing?

In this post from last week, I noted an apparent misspelling of “earnings” as “earings”. One reader queried whether “earing” itself was a misspelling of “earrings”. It certainly could be, but “earing” is itself a proper noun referring to a line used on sailing ships. Richard Henry Dana, Jr. refers to “earings” several passages from Two Years Before The Mast:

The first on the yard goes to the weather earing, the second to the lee, and the next two to the “dog’s ears;” while the others lay along into the bunt, just giving each other elbow-room. In reefing, the yard-arms (the extremes of the yards) are the posts of honor; but in furling, the strongest and most experienced stand in the slings, (or, middle of the yard,) to make up the bunt. If the second mate is a smart fellow, he will never let any one take either of these posts from him; but if he is wanting either in seamanship, strength, or activity, some better man will get the bunt and earings from him; which immediately brings him into disrepute.

This was the first time I had taken a weather earing, and I felt not a little proud to sit, astride of the weather yard-arm, pass the earing, and sing out “Haul out to leeward!” From this time until we got to Boston, the mate never suffered any one but our own gang to go upon the mizen topsail yard, either for reefing or furling, and the young English lad and myself generally took the earings between us.

Later named for the author, Richard H. Dana, Jr. dubbed Dana Point “the only romantic spot in California”.